Retirement Funds

If you are planning to leave bequests to both heirs and Stonehill, you may save taxes if you give other property to your heirs and name Stonehill as the beneficiary of all or a portion of your retirement-plan assets. There are significant tax advantages to using retirement funds.

For many people, the best method of giving is through a retirement plan. Retirement plans, including pension, 401k,IRA, Keogh, 403(B), are often subject to extremely high tax rates that result in an “involuntary gift” to the federal government. The tax rates for retirement plans often range from 50%-60%.

At the time of your death, the assets will be paid directly to Stonehill and will not flow through your probated estate. The assets will be subject to neither an estate tax nor a federal income tax, and consequently, the entire balance will be preserved for the causes at Stonehill that you value.

Here’s an example:

Tom dies with a taxable estate of $1,000,000, including $100,000 in an IRA. In his will, Tom leaves the $100,000 in retirement-plan funds to Stonehill to fund scholarships for students majoring in fine arts. The balance of his estate (after estate taxes) goes to his daughter, Erin.

Tom’s estate pays $39,000 less in taxes as a result of his gift to Stonehill and Erin also receives his entire bequest income tax free since it came from assets other than Tom’s retirement funds.

If you are interested in controlling the disposition of your retirement plan’s assets to avoid an “involuntary gift” to the federal government and to have a simultaneous lasting impact on Stonehill, we would be pleased to assist you in facilitating this process.

Retirement plan gifts can often be effectively accomplished through Charitable Remainder Trusts and Lead Trusts.

Visit Gift Story for an interactive product that uses a multimedia presentation of slides, audio and graphics to illustrate how one or more gift plans can help achieve your charitable and financial goals. This session will allow you to choose from 10 presentations customized to your situation and your goals.

For more information please call the Gift Planning Office at 508-565-1344.